Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

For the next three questions consider: Wisdom Tree Funds wants to do some scenario analysis for the an initial outlay of $90,000 with 5 years

image text in transcribed

For the next three questions consider: Wisdom Tree Funds wants to do some scenario analysis for the an initial outlay of $90,000 with 5 years of straight line depreciation for the project. There is no added Sales revenue, costs, and taxes under the scenarios are given below. working capital needed. The required return is 9%. The project has 5 years and there is no salvage value. Best Base Worst Sales 90,000 65,000 38,000 Costs 30,000 25,000 18,000 Deprec 18,000 18,000 18,000 EBIT 42,000 22,000 2,000 Tax Expense 14,280 7,480 300 NI 27,720 14,520 1700 OCF= 27. a. The OCF for the BEST CASE for Wisdom Tree Funds is: 36,000 b. 45,720 C. 32,520 d. 19,700 28. The NPV for the BEST CASE for Wisdom Tree Funds is: NOTE: There are five cash flows that are identical (PMT key as a negative number) and an initial outlay. 91,219.10 b. 85,276.38 300 C. 87,834.85 d. 89,511.88 a. 29. a. The NPV in the Worst Case is negative and the Base and Best Case is positive for Wisdom Tree Funds. From this scenario analysis: we clearly should go ahead with the project. b. we have a range of values for NPV to use to decide if we want to go ahead with the project or not. we clearly should not go ahead with the project. d. we should flip a coin to make our decision. C. 000 and will be depreciating it for

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Oxford Handbook Of Sovereign Wealth Funds

Authors: Douglas J. Cumming, Geoffrey Wood, Igor Filatotchev, Juliane Reinecke

1st Edition

0198754809, 978-0198754800

More Books

Students also viewed these Finance questions

Question

7. Understand the challenges of multilingualism.

Answered: 1 week ago

Question

5. Give examples of variations in contextual rules.

Answered: 1 week ago